Collecting Outstanding Medical Bills: When to Call in Reinforcements
As the owner of a medical practice, you count on patients’ payments to pay for the equipment, materials, and staff necessary to provide the best care possible. Unfortunately, patients do not always cooperate. Too often, patients who experience financial difficulties make medical bills the least of their priorities. While they may have good intentions to pay for the care they received, if they cannot, they let statements pile up, assuming that their outstanding medical bills will not adversely affect their credit. These patients would be wrong.
At Cloud Willis & Ellis, LLC, our Birmingham creditors’ rights attorneys understand how frustrating it can be to have a client not pay for services rendered. Though we also understand that financial situations can make it difficult for one to pay, that does not dismiss their obligation. If you are having difficulties getting a patient to pay, you may be wondering when enough is enough, and when it is time to call in reinforcements.
Should a Collection Agency be the Go-To Solution?
While collection agencies help to effectively resolve delinquent accounts, too many medical practices turn to third-party firms prematurely. Third-party collection agencies should only be used when a patient’s bill has gone through all of the practices’ internal procedures for collecting payments. This is not only a common courtesy for the patient (as the patient may have moved and not received the bill; the bill could have gotten lost in their pile of mail; or the patient may have other extenuating circumstances that made it difficult for them to pay one month), but also, it can save your practice a good deal of money. Collection agencies charge anywhere from 20 percent to 50 percent of the amount collected. If there is even a slight chance that the patient will pay, hold off, as you could receive the full sum owed to you as opposed to a fraction of it.
Additionally, you want to consider patient relationships before hiring an agency to pursue payments. While money is important, ongoing relationships with patients are even more so. If the patient in question is a long-time patient who has always paid their bills on time, calling in a credit collections firm may squash their trust in you and therefore effectively end that long-term relationship. While agencies are supposed to act as a representative of the practices they work with, too often the person making the calls will tell patients whatever is necessary to get your money—after all, they are in the business of making money too. If utilizing a collection agency is the only option, consider hiring two different agencies, give them a similar blend of delinquent accounts, and see how each handle the phone calls. You are looking for effectiveness and customer service, so make note of each.
Keep in mind that when pursuing payments, the patients’ still have rights. Under the Fair Credit Reporting Act and the Fair Debt Collection Act, patients have the right to ask for verification of the amount owed to them. The agency is required by law to tell them exactly how much the original bill is as well as what they owe in fees and charges. Until the agency can come back with an accurate response, the patients’ collection account will be frozen. Before allowing any agency to work on your behalf, make sure they are thoroughly familiar with the rules and regulations regarding fair debt collection practices.
Prevent the Need for Collections
Most practices that utilize collection agencies find that they spend far more money on the services than they receive back. For this reason, if you can, prevent the need for a third-party agency entirely. You can do this by honing your internal collections practices and making it clear to patients from the beginning what you expect from them.
Some tips for developing sound internal processes include:
- Flag charts of patients with delinquent balances and be prepared to discuss the outstanding balance with them when they are back in the office;
- Train staff and doctors on how to handle financial discussions. If necessary, develop scripts to follow for the most effective outcome.
- Send statements frequently. Keeping patients informed of their balance and they will be less likely to forget about it.
- If the above steps fail, it may be time to send out collection letters.
Work With an Experienced Birmingham Creditors’ Rights Attorney
Medical practices rely on patients to pay their bills in full and on time to keep operating at maximum efficiency. Without patients and the practice working together, late and missed payments can become a serious issue, one that will eventually need to be addressed by a third party creditor. If you have done everything on your end to collect a patient’s payment to no avail, reach out to the Birmingham creditors’ rights lawyers at Cloud Willis & Ellis, LLC to discuss your options. Call 205-322-6060 to schedule your consultation today.